The European Parliament will next week debate and vote on a comprehensive package of proposed measures to help increase the capacity of Europe's airports, reduce delays and improve the quality of services offered to passengers. The proposed measures address the quality of services passengers and airlines receive on the ground before they take off and after they land (for example, baggage handling, check-in, refuelling), the transparency of decisions on airport noise, as well as the efficiency of the complex network of take-off and landing slots that make up every journey. The debate is scheduled for Tuesday 11th December afternoon, vote Wednesday 12th December.

Vice President Siim Kallas, European Commissioner responsible for Transport said: "Europe's airports are facing a capacity crunch. If business and the travelling public are to take best advantage of the air network, we have to act now. 70% of all delays to flights are already caused by problems on the ground not in the air. On present trends, nineteen key European airports will be full to bursting by 2030. The resulting congestion could mean delays for half of all flights across the network. The status quo is not an option for airports in Europe. Faced with intense global competition, if we do not change the way we do business, we may not be doing business at all."

The package consists of a policy summary document and three legislative measures, on slots, ground-handling and noise.

On slots

The Commission proposals introduce market based mechanisms for the trading of slots between airlines in a transparent way, as well as measures to ensure that existing capacity is used by airlines - by raising the threshold on the "use it or lose it rule" from 80%-85%.

The proposed measures on slots would allow the system to handle 24 million more passengers a year by 2025. They will be worth €5 billion to the European economy and create up to 62,000 jobs over the period 2012-2025

Five European airports are currently operating at capacity: Düsseldorf, Frankfurt, London Gatwick, London Heathrow, Milan Linate. On current trends this could increase to nineteen key airports by 2030, including for example Paris CDG – with very significant consequences for delays and congestion.

On ground-handling

The Commission is putting forward proposals to improve the quality and efficiency of ground handling services at airports.

Measures will include: increasing, for key ground-handling services that are still currently restricted - baggage handling, ramp handling, refuelling and oil, freight and mail services - the minimum choice of ground-handlers available to airlines at large airports from two to three. At the same time, there are new proposals to allow Member States to go further in protecting workers rights so staff can transfer under existing conditions when a contract goes to a new provider. This is essential to provide the stable employment conditions necessary to maintain a high quality workforce in what is a labour intensive sector.

The proposals strengthen the role of airports as the "ground co-ordinator" with overall responsibility for the coordination of ground-handling services at an airport. They provide airports with a set of new tools to do this, for example, to require minimum quality standards to be respected by all ground-handlers at their airport. These measures will strengthen also the resilience of airports facing major disruptions.

On noise

The Commission proposals increase the transparency in the process of setting noise-related restrictions at airports, including an oversight role for the Commission. This is not about targets, but about the decision-making process. It gives the Commission a scrutiny role – it does not replace a Member State's final decision. The proposals also update existing legislation in line with technological developments to make it easier for authorities to phase-out the noisiest planes.

Decisions on cutting noise levels have to balance protection for citizens living close to airports against the needs of those who wish to travel. Decisions must be taken in line with guidelines set at international level (by the UN body, the International Civil Aviation Organisation). Residents are entitled to be protected from excess noise from airports but it is necessary to take into account costs in terms of lost capacity and the impact on economic growth in a region.

Next steps

The Commission's proposals must be approved by the European Parliament and Member State Governments by the "co-decision" procedure, before being adopted.

Europe's Airports 2030: Challenges Ahead

The 10 key facts and figures

Airports matter - almost 800 million passengers used EU airports in 2010, a third of the world market, almost three times more than when air traffic was liberalised in the early nineties.

Aviation is one of Europe's most competitive sectors. Airports are a vital part of our aviation system and airports are increasingly important to our economy. Europe has for historic and geographical reasons established a strategic position as an aviation "hub" for the world.

But competition is increasing. Half of the world’s new traffic added during the next 20 years will be to, from, or within the Asia Pacific region. Over the next five years, air transport growth will be driven mainly by regions like Asia Pacific, the Middle East and Latin America.

Faced with intense global competition, there are two major challenges facing European airports: capacityand quality.

Europe’s airports are facing a capacity crunch. Air traffic in Europe will nearly double by 2030. Yet Europe will not be in a position to meet a large part of this demand due to a shortage of airport capacity.

Already today 5 major European airport hubs are at saturation - operating at full capacity: Düsseldorf, Frankfurt, London Gatwick, London Heathrow, Milan Linate (Eurocontrol).

By 2030, on current trends 19 key European airports will be at saturation, including for example, Paris CDG, Warsaw, Athens, Vienna and Barcelona1. The resulting congestion could mean delays affecting 50% of all passenger and cargo flights (see detail in annex).

Airport capacity must be optimised. Also, noise restrictions must be proportional to the identified noise problem.

Quality and efficiency of services at airports must be improved. Today, 70% of all delays to flights are already caused by problems due to the turn around of aircrafts at airports (delays caused by airlines or their ground-handlers, airports or other parties involved in the turn around process)2.

The overall quality of ground-handling services has also not kept with evolving needs especially in terms of reliability and resilience, safety and security. Disruptions experienced have shown the need for increased coordination of ground operations for European airports and the network as a whole (knock-on effects) so as to ensure continuity of airport operations.

The Airport Package

To face these challenges, the European Commission has today adopted a policy document and three legislative proposals:

to help tackle a shortage of capacity at Europe's airports;

to improve the quality and efficiency of ground-handling services; and

to improve the transparency of the decision making process on noise restrictions.

Slots

What is an airport slot?

An airport "slot" is a permission to use runways and terminals to operate a flight to or from a congested airport on a specific date at a specific time.

Slots are a planning tool for rationing capacity at airports where demand for air travel exceeds the available runway and terminal capacity. Airport slots are vey important to airlines in particular as they enable them to fly to and from some of the busiest, capacity-constrained airports in Europe.

What are the current rules?

Under current rules, slots are allocated to airlines under an administrative system, established under a 1993 EC Regulation. Slots are allocated for winter and summer seasons (late March-late October is the Summer season). A minimum of 5 slots allocated at the same time on the same day of the week during a season forms a series of slots. Under the 1993 rules, if airlines use a series of slot 80% of the time they can retain it for the next season (grandfather clause). Otherwise it is returned to the pool. If the use of a slot falls below 80% for a season, it must be returned by the airline to the pool for re-distribution.

The pool system is also used to allocate new capacity. Slots from the pool are allocated by an independent co-ordinator. 50% of the pool slots go to new entrants. 50% go to other airlines on a first come first served basis. There are currently 89 European airports experiencing a level of congestion which is such that they use a "slot" system.

In practice, only in the UK has a system of secondary trading of slots developed.

What is the problem?

The current administrative system of slot allocation is inefficient. The "grandfather clause" is not sufficiently performant as it allows for capacity to remain unused. More broadly, there is no market incentive for airlines to sell on under used slots to other airlines who could make better use of the capacity. The system hinders competition and passenger choice: no concrete financial value is placed on a slot which could serve as an incentive to trade a slot with another airline, for example. The system hinders the mobility of slots which is important for a dynamic aviation market.

In addition, since the regulation was conceived in 1993, air traffic has increased dramatically, the number of airports facing capacity constraints has also grown and the situation will worsen if nothing is done.

At many congested airports it is already difficult for carriers to enter the market or indeed grow their operations since airlines will do everything necessary to keep their slots from one season to the next. Pool slots are often only available for flight timings which are less attractive (e.g. mid afternoon, late evening, when fewer people wish to fly). If nothing is done, the situation will get much worse – 19 airports in Europe are likely to be operating at full capacity by 2030 leading to delays on 50% of all flights.

The new proposals

The revised slot regulation will introduce key measures including:

Secondary trading of slots: the new proposal will allow for the trading or slots between airlines across the EU. The 1993 Regulation did not provide for secondary trading of slots between airlines, however it did not specifically ban it. Over time, the situation has evolved so that a patchwork of different practices has evolved across the EU. For example, secondary trading exists in the UK, but it is banned in Spain.

Establish clear conditions for the transparent trading of slots so all market competitors can know what can be bought and sold. The Regulation establishes clearly a coherent regime to ensure transparency in the trading of slots. This will be supervised by national authorities.

Increase the slot utilisation threshold from 80% to 85% and the length of the slot series from the current 5 to 10 for the winter season and 15 for the summer season - to impose a stricter discipline on airlines by tightening the rules requiring airlines to demonstrate that they have used their slots sufficiently during the season (the so-called 'use it or lose it' rule). The aim is to ensure that airlines who wish to keep slots for the coming season, use the capacity.

It is estimated that the changes proposed would allow the system to handle 24 million more passengers a year. The changes proposed could be worth €5 billion to the European economy and create 62,000 more jobs over the period 2012-2025

SECTION 2: Ground-handling

What is ground-handling?

Ground-handling covers a wide variety of services for airlines delivered at airports in support of the operation of air services. It includes not only highly technical services such as maintenance, fuel and oil services and freight handling, but also services which are essential to passengers' safety and comfort, such as passenger check-in, catering, baggage handling and surface transport at the airport.

Ground-handling services are an essential part of the aviation system.

A 1996 Directive on Ground-handling (Directive 96/67/EC) introduced competition in different ground-handling services at airports to companies not affiliated with the airport or the national carrier.

Directive 96/67/EC adopted in 1996 introduced: full opening to competition for the majority of ground-handling services. The Directive has brought many benefits, including an increased number of suppliers and new providers as well as an improvement in quality, according to the airlines buying the services; and at the same time the lowering of prices.

However, Member States were given the ability to limit competition to minimum of two suppliers for four important categories involving the aircraft itself (“restricted services“) (baggage handling, ramp handling, fuel and oil handling, freight and mail handling). The result today is that the degree of competition in these restricted services and the access regime varies significantly across Member States.

In practice, only a limited number of countries including: the UK, the Nordic countries, the Netherlands and Poland have open competition in the key "restricted services". Others, like Spain, Germany, Austria, Belgium, Portugal have chosen to limit competition in the "restricted services" to the minimum of two service providers.

What is the problem?

70% of all flight delays are caused by problems on the ground at airports, not in the air.

A wide consultation with stakeholders (carried out end 2009- early 2010) shows that further improvements of ground-handling services are necessary to tackle persistent problems with efficiency and quality (reliability, resilience, safety and security, environment).

And while Europe is in the process of reforming its air traffic control system (Single Sky proposals) in order to improve the performance of air traffic management. We cannot tackle successfully problems of delays and congestion if we do not improve the performance of airports on the ground.

The new proposals

The new proposals on ground-handling will include key measures to:

Ensure that airlines have an increased choice of ground-handling solutions at EU airports. The proposals introduce full opening of the self-handling market for airlines. At the same time they will increase the minimum number of service providers (in restricted services) from two to three at large airports.

Give airports more control over the co-ordination of ground-handling services. Establish a new role for the airport managing body as "ground co-ordinator" of ground services (including by setting minimum quality standards). That means that airports are tasked with the proper co-ordination of ground-handling within an airport. And most importantly they have the tools to establish minimum quality standards to be respected by all groundhandlers at their airport. In addition the proposals will clarify rules for subcontracting.

The proposals will clarify the legal framework for training and transfer of staff. Ground-handling is a very labour intensive industry (labour accounts for 65%-80% of the costs). High quality, well trained staff are essential to maintain the safety and security of ground-handling services, as well as to ensure quality services. To this end, the new proposals include provisions to strengthen the training and stable employment conditions of staff, notably, by

Introducing a new possibility for Member States to impose a requirement on companies that win ground-handling contracts in restricted markets to transfer the staff from the previous contract holder with their full existing conditions

Establishing compulsory minimum training for staff.

In addition, the proposals will:

Strengthen the ground-handling market via the mutual recognition of national approvals for ground-handlers issued by Member States. In other words, an approval issued in one Member State would entitle a handler to provide services in a different Member State. 'Mutual recognition' is a standard mechanism used in the European single market to break down barriers to providing services across borders;

Introduce greater transparency on how airlines (and their handlers) are charged for airport 'centralised infrastructures' (for example, fees charged by the airport for the use of baggage processing systems) and under which conditions airports themselves can provide ground-handling services. This is to create a more level playing field to allow independent handlers to compete more effectively.

Section 3: Noise

The current system

Noise-related operating restrictions are put in place by Member States at most large European airports. Restrictions protect people living near airports from the effects of aircraft noise and form part of a wider noise-abatement strategy, which has four principal elements. Those elements are: reduction at source (quieter aircraft); land-use planning and management; noise abatement operational procedures (e.g. avoiding overflight of a specific area); and operating restrictions (e.g. bans on flights during the night). As these measures may reduce the available capacity at airports and also impact non-EU airlines, the decision-making process must follow international principles on noise management (the balanced approach established by the International Civil Aviation Organization (ICAO)).

The current rules

Under Directive 2002/30, Member States are obliged to ensure that decisions on noise-related operating restrictions carefully balance the need for noise protection for residents near an airport against the possible impact of such restrictions on air traffic. The process to be followed, including noise assessments, must properly assess the proportionality, cost-efficiency and transparency of noise-related operating restrictions.

What is the problem?

There are still many inconsistencies as to how such restrictions are put in place around Europe. In some cases, noise restrictions may not be compatible with the safest operational conditions for the operation of flights into an airport. There may be an excessive impact on the capacity of an airport due to noise restrictions, which can in turn have a knock-on effect at other airports. Noise restrictions can also have other environmental impacts such as additional holding patterns which may be required for incoming aircraft. Noise restrictions may also encourage further residential development near the airport which should be kept clear in order to reduce the noise impact of airport operations. Lastly, from a procedural point of view, there is often a tendency for noise restrictions to become 'cast in stone' without review, meaning that new operational techniques, technological solutions or aircraft technology cannot easily be deployed.

The new proposals

The proposals aim to improve the procedures used to establish noise-related operating restrictions at EU airports, in order to improve clarity and transparency and better reflect the 'balanced approach'. This will create a common European approach to setting restrictions. The objective is to improve the way that restrictions are put in place rather then to call into question the legitimate need to protect residents from excess airport noise.

The new proposals will:

Allow airport authorities to phase out more easily the very noisiest aircraft which can account for a disproportionate amount of noise nuisance. This means reviewing the outdated definition of marginally compliant aircraft to take account of developments in technology.

Give the Commission a scrutiny role, ex ante, on new noise measures, with a view to ensuring a consistency of approach across Europe. The proposals are not about noise target setting, but about the procedures prior to decisions. The aim is to ensure that restrictions on noise must be justified, in a transparent way and are evidence-driven, and follow "the balanced approach" agreed by the UN- body responsible at international level (ICAO, International Civil Aviation Organisation). This is however only a review right for the Commission, it will not substitute for a Member State decision.

Include practical steps to support the implementation of measures, including: the clarification of the links between noise measures and airport management;the improvement of noise mapping and administrative support to ensure the efficient use of the European airspace;

The proposals should allow airports to 'decouple' the growth in air traffic from the level of noise nuisance suffered by local residents, allowing improved noise protection at the same time as preserving growth and the economic contribution which it makes.